Competition between maquiladoras is increasing, so it is vitally important to offer optional benefit packages to attract and above all retain qualified personnel, which in turn provides the Mexican worker with job satisfaction and motivation.

The common employee benefits in Mexico are divided between mandatory benefits, the ones that are required by law, and voluntary employee benefits such as transportation, saving funds, subsidized lunch, paid training, and more.

We sat down with Humberto Alvarez, CPI's HR Manager to get insights into the most common employee benefits fin Mexico to be used for talent recruitment and employee retention in manufacturing plants in Mexico.

1. Why do maquiladoras and foreign manufacturers offer the best employee benefits packages for Mexican workers?

Manufacturers in Mexico seek not only to manufacture their products in a cost-effective way but also to want the most qualified personnel. To ensure employee retention, manufacturers in Mexico recruit the most qualified workers by offering an attractive voluntary benefits plan on top of the mandatory benefits required by Mexican labor laws. The cost of turnover for Mexican workers can be expressed in productivity loss, loss due to training new hires, team morale loss, and issues with workplace safety.

Optional employee benefits packages should be tailored for each specific company. CPI guides companies to build the best package of optional benefits taking the specific market factors, company goals, and the company’s characteristics into account. Regardless of the mandatory benefits required by Mexican labor law and the optional benefits packages for Mexican workers, the labor costs in Mexico are still less expensive than in the United States. (Learn more about Mexico minimum wage)

2. What are themost common employee benefits in Mexico?

Paid Training

Beyond the standard obligation of training new employees, manufacturers will also offer financial support for employees and sometimes their children to further their education. Manufacturers may offer plans that include support for their staff to obtain their master's degrees, bachelor’s degrees, or advance their technical and continuing education paths.

Many high-tech manufacturers also have specialized training centers for students to study or obtain certifications in processes specific to the company’s industry and products. Depending on the company’s goals and characteristics, manufacturers may require positive employee performance, attendance records, and longevity at the company before these benefits can be accessed. This also helps promote company loyalty and motivation for advancement within the company.

Savings Fund

The Savings Fund's primary objective is to encourage employees to save for retirement as well as improve their current standard of living. This is done through contributions from the employee paycheck, with the company matching the percentage to save during each pay period. The savings fund can be used for loans to employees, charging an interest rate that is stipulated within the same Savings Fund plan. Contributions must not exceed 13% of the employee's wages in a pay period.

Many workers contribute to these plans knowing that at a certain time of year the employee will need additional money to meet various expenses or to allocate it to savings over the long term. Similarly, having access to loans via the savings fund allows employees to face unforeseen events that could cause financial hardship for their families which might contribute to absenteeism and loss of productivity.

Food Vouchers and the Company Cafeteria

Manufacturers may also offer food vouchers that allow the employee to purchase not only groceries, but also any item that improves the employee's quality of life without having to allocate part of their salary for these expenses. They can be used in supermarkets, shoe stores, hardware stores, pharmacies, convenience stores, etc. The purchase of alcohol or cigarettes is prohibited.

In addition to or instead of the food vouchers, manufacturers may also include a company cafeteria. The cafeteria option usually includes prepared meals made by company staff or an outside vendor and are offered free of charge or at a discounted rate to staff. This is also helpful as many maquiladoras (What is a Maquiladora?) and manufacturing facilities may not be located at the heart of a city center, minimizing the need to travel for employees that need to purchase meals every day. It was also observed that having a dedicated space during meal breaks contributes to the employee’s ability to rest while eating something nutritious before returning to work.

Transportation Vouchers or Company Provided Transportation

To ease the need and expense of travel to and from work, manufacturers will often offer a transportation voucher in cash or will provide company managed transportation. Company-exclusive transportation services will create routes according to the bulk of the company's population. In the same way, routes can be established where it is considered that future employees of the company can be found, thus contributing to a recruitment strategy.

Having a transport voucher or better yet, a transportation service, can have benefits for both the company and the employee. On the one hand the employee will not have to worry about allocating part of their salary to get to work and lessens problems that can arise using private or public transportation methods. On the other hand, this can represent a decrease in absenteeism as well as improvements in productivity for the company.

Employee & Family Parties: Summer Gatherings, Christmas Parties and End of the Year Get-Togethers

Family is extremely important in Mexico. What better way to honor employees and their dedication to family than through holiday and annual gatherings! These events promote coexistence, integration, and strengthening of the company’s support of the employee and their families.

Summer parties can be oriented more towards sporting events, craft workshops, and barbecues. The Christmas party or posada, a tradition in Mexico, generally includes music, dinner, dancing, and gifts are frequently raffled off. In addition, companies will often have a ceremony at the Christmas gathering for employee recognition and appreciation, recognizing goals met for the year.

To break up the work-life routine, employees are also very fond the celebrations for Mother's Day, Father's Day, Children's Day, Day of the Dead, and Halloween. Any pretext to celebrate an event can have beneficial outcomes for employee morale, family inclusion, and workplace satisfaction.

Child Care for Mexican Manufacturing Workers

The workforce in Mexico includes both men and women, many of whom have families and children. Strong work ethic and dedication to family are admired qualities in Mexico. Depending on the work-life balance, having children cared for by family members or even neighbors can often result in absenteeism when problems arise.

To combat this and to contribute to employee wellbeing and job satisfaction, companies will work with both public and private daycare centers. Additionally, some companies will have daycare centers at their facilities under agreement with Mexican Institute of Social Security (IMSS), to provide for employee’s children while they are at work. By supporting working parents, companies find a reduction in absenteeism and turnover.

3. How does a Provider of Shelter Services in Mexico like CPI help manufacturers attract and retain stellar Mexican workers?

Manufacturers working under CPI’s Maquiladora Shelter Program or using CPI’s Administrative Services, have access to our experts for talent recruitment, mandatory benefits and tailoring optional benefits packages. Working with your company we will help design the hiring packages commiserate with your company’s goals. Though some of the benefits represent a cost to the company, they do not compare to the costs of poor recruitment, absenteeism, and underqualified workers.

Regardless of the optional benefits that you are thinking of implementing, the objective should be to attract, integrate, retain, and develop the employee. By offering some of the suggested optional benefits above companies will be more successful at reducing distractions and costs for the company and the employee, thereby allowing your staff to focus on work which leads to higher workplace morale and loyalty.